The veterans’ health care system can trace its roots to the Civil War, but the modern-day network of VA hospitals began to take shape in the wake of World War I, as a disparate group of veterans’ insurance and health programs were consolidated into a single agency. That agency quickly became mired in scandal. In the 1920s, Col. Charles Forbes, the first director the Veterans’ Bureau, devised ingenious ways to bilk the federal government out of millions of dollars. Under his leadership, the VA purchased huge quantities of hospital supplies—including a 100-year supply of floor wax—which were then privately resold as government surplus. For his efforts, Forbes earned a two-year sentence in federal prison, while the loss to taxpayers came in at well over $2 billion in today’s dollars. Although the VA responded to these crimes by adopting strict civil service laws, those rules led it to become an inflexible organization stifled by its regulations.
Given the agency’s abysmal reputation, few expected that the VA could effectively hold up under the mounting pressure to care for millions of wounded soldiers at the end for World War II—and for good reason. Although there were 97 hospitals in the VA system at the time, fully two-thirds of the patients were World War I or Spanish-American War veterans. The agency’s reputation for incompetence was further ingrained in the public’s mind by a series of scandals, including charges of patient abuse and neglect, and a media exposé that highlighted the poor quality of VA facilitates and physicians.
But thankfully, the story doesn’t end there. After years of neglect, the VA shed its longstanding reputation for medical mediocrity by developing an innovative partnership with medical schools in 1946. Medical school faculty agreed to serve joint appointments as VA staff physicians in exchange for access to VA hospitals, a collaboration that led to a dramatic increase in the quality of veterans’ medicine. This partnership—one that is still in place today—is the reason why many VA hospitals are built in close proximity to medical schools, and why so many American medical students receive part of their training at the VA.
As successful as the VA had been in improving the quality of its health care in the postwar era, it did not fare well during the Vietnam War. After a flurry of bad publicity, including a controversial investigation into conditions at the Bronx VA, the agency developed a reputation as a sclerotic bureaucracy delivering substandard health care in dilapidated facilities. The larger problem, however, stemmed from the VA’s inability to adapt to changes in the delivery of medical care. Unlike the private sector, which began to focus on primary and preventative care, the VA remained wedded to its outdated and largely ineffective model of intensive, in-patient health care throughout this period. That situation made it difficult for veterans to receive needed primary care at local facilities and led some conservatives to recommend that the VA system be dismantled. Others, such as Sen. Alan Simpson, became openly critical of the VA’s inability to reign in its costs. Perhaps the most notable scandal of this era came when Edward Derwinski, George H.W. Bush’s first Secretary of Veterans’ Affairs, was forced from office after he proposed opening some VA hospitals to Medicaid patients in an ill-fated effort to address these concerns.
Predictions about the agency’s impending death would prove far from the mark—but again, failure led to reforms at the VA. With the adoption of the 1996 Veterans’ Health Care Eligibility Reform Act, the VA transformed itself into an integrated health care system. Not only did these changes make veterans’ care easier to access by opening hundreds of outpatient clinics across America, they also increased the VA’s capacity to care for more veterans and to embrace innovative ways to track and measure health care outcomes.
The recent reports of falsified records at the Phoenix VA are deeply troubling—and this agency, now nearly a century old, is no stranger to failure or scandal. But if today’s scandal follows the pattern of prior scandals, there is some reason for guarded optimism: today’s attention could lead to another cycle of much-needed improvements in the quality and availability of health care for America’s veterans.